Star Witness Does Major Damage to FTX Founder’s Case

( – If the jury in Sam Bankman-Fried’s fraud trial makes their final decision based exclusively on his ex-girlfriend’s spoken words, the disgraced former cryptocurrency titan will likely be going away for a long time. On October 13th, prosecutors played a recording of former Alameda Research CEO Caroline Ellison admitting that her one-time lover had knowingly signed off on illegal activities.

While Ellison’s voice was a new addition to the trial, the accusations the recording covered were not. Prosecutors alleged from the very beginning that Bankman-Fried had taken customer funds from his world-famous FTX crypto exchange and fraudulently used them to meet expenses that had been incurred at Alameda, a hedge fund that operated as a sister company to FTX.

Ellison sat in the galley while government attorneys played a tape that had been recorded at an Alameda emergency staff meeting on November 9th, 2022. The overall cryptocurrency market capitalization was in steep decline at the time and Alameda had no way to meet the loan obligations of their already heavily leveraged assets.

On the tape, Ellison could be heard explaining to Alameda executives and staff that most of their company’s loans had been “called” as a result of “crypto being down.” In an effort to meet their loan recalls, they borrowed “a bunch of money” from FTX, she went on to say. By default, the overwhelming majority of FTX funds were derived from customer investments.

In the background of the recording, an employee could be heard asking Ellison who had been responsible for authorizing the transfer of FTX customer investments to Alameda. A reply from SBF’s former girlfriend – “Sam, I guess” – followed the question. In defense cross-examination, Ellison was asked about her statement of “I guess.”

The 28-year-old said the words were nothing more than a verbal tic and that her identification of SBF should be interpreted concretely. She has implicated Bankman-Fried in $10 billion in illegal transfers.

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